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Adam Hayes'  Instablog

Adam Hayes
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I have worked in the financial markets since 1999 in New York, Chicago, Amsterdam, and electronically. Expertise in listed equity options strategies and volatility sales & trading. Was a Market Maker in options on the AMEX and also worked on the trading floors of the CBOE, CME and EuroNext.
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  • Why Seeking Alpha Articles Should Be Ignored.

    Since 2004, Seeking Alpha has been an incredible resource for the individual investor to not only receive information regarding the markets and individual stocks, but to also pen their own articles for the benefit of others. This freedom allows unheard voices to get an audience and that is a very good thing.

    But it is also a very dangerous thing. Seeking Alpha articles show up in company news feeds along side legitimate news sources, and there is no asterisk telling potential readers that the articles written on Seeking Alpha are not written by financial journalists, financial professionals, or even educated individuals.

    It allows articles to be published and distributed to mainstream financial websites that should be relegated to blog posts, forums or comment sections.

    Take for example this recent article that was sent to nearly 40,000 people and read by many more. Mind you, the author of this article was paid by Seeking Alpha real money:

    I highlight this article because many individual investors are interested in finding out about the 3D Printing space and when you look up 3D Systems (NYSE:DDD) or Organovo (NYSEMKT:ONVO) on Google Finance you see this article as company news for the day (Dec 30, 2013).

    So is this news? No! It is pure drivel! It is the unsubstantiated opinion of one individual, who is not a market professional, researcher or academic. There is no data and no analysis. But to many this appears as real news and real investment decisions may be made. Scrolling down to the comment section of that article we see most users find the article to be worthless- but the damage has already been done.

    Another recent 'article' posted by a user with all of 2 articles (including this one) showed up in the company news feed for Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB) which has been a hot topic lately, and is precisely why I highlight it. Should this article really be used to make investment decisions?

    More dangerous still is that this outlet can be used nefariously to run pump and dump schemes or to otherwise spread misinformation. There have been examples of contributors coming under SEC scrutiny (mainly in penny stock schemes), however for the most part these articles generally fly under the radar and are never investigated- even if wrong doing has occurred.

    So what is one to do when they see an article from Seeking Alpha in the news feed? Don't believe everything you read there as fact, or simply ignore it. When was the last time you read a truly compelling, independent analysis on Seeking Alpha? When was the last time real material news broke first on that site? How many times did it produce actionable and profitable trading decisions for you? I would love to hear those true stories in the comments.

    Disclosure: I am long DDD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Jan 03 11:47 AM | Link | 5 Comments
  • An analysis and closer look at the current Unemployment data

    Well, unemployment rate in line with expectations at 9.8%, up from last months 9.7%. BUT if you look at and break down the #s a bit you get some bad news that will surely be overlooked by the mass media outlets
    -Payrolls loss is accelerating not improving, meaning that the next few months unemployment rate % should keep creeping higher.

    -Avg weekly work hours dropped to 33.0 the lowest ever (and tied with Jun'09) - this is BAD - those that are working are working less, making less weekly earnings, and means job creating will be slow to come. This could also play negatively to productivity.

    -Avg (and also median) time in weeks for unemployed job seekers to look for jobs increased.. most people out of work now are waiting more than half a year to get a new job!

    -The 9.8% represents the so-called U-3 measure of labor underutilization. (
    This is the "official" seasonally adjusted unemployment rate BUT it discludes those unemployed who stopped looking for a job and gave up, those who are so-called UnderEmployed, people who are forced into temporary or part-time jobs but would like full employment due to economic reasons and so on. All those are lumped into the U-6 # which is now an astounding 17.0% and that represents a much clearer picture of the current jobs situation.

    -The unemployment rate amongst teenagers and students has risen to a staggering 25.9% .. young job seekers must be VERY discouraged and probably will be the most affected going forward with a longer lasting impact on their psyches and thus the future of American productivity and innovation.

    -Our job force and employment profile in the USA might be getting "dumber".. The unemployment rate for those without even a HS diploma fell from 15.6% to 15.0%, meanwhile those with diplomas, or college and higher degrees rose! This has been a trend over the past few months and not just a one-off.

    -Unemployment insurance initial (and continuing) jobless claims continue to be large, but even more interestingly they seem to be constantly revised WORSE week to week.

    So.. the unemployment and jobs market continues to be weak despite the constant assurances from the gov't and the mass media that things are improving or at least stabilizing.  These data speak clearly and the fact is that this recession is NOT over and we will not see a recovery until people start working and producing and earning money again. Without steady income, consumers cannot and will not spend. Additionally, unemployed people tend to have little or no private health insurance coverage and this will put a huge damper on growth, the health care system and the gov't. 

    The markets in the past few days have recognized the data and reacted accordingly. Hopefully the future will improve but right now I am a bit scared still!


    Oct 02 9:19 AM | Link | Comment!
  • a curious thought experiment about money supply vs velocity of money:

    Imagine the Gov't makes known to the public that it has printed $5 Trillion BUT it will be hoarded in a vault that will never be opened. It will never be made available to the public or private sector and the gov't itself can only tap this resource in the most dire of emergencies.
    What happens to the price of dollars? Does the mere knowledge of the existence of such a sum of dollars cause inflation even though it will almost never be touched and used?
    Or does the fact that it is indeed inaccessible negate the fact that it exists in terms of its effect on money supply and inflation?

    I really have no idea, but I tend to think that the mere knowledge of its existance will offer some downward pressure on the dollar
    Sep 04 8:50 AM | Link | Comment!
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  • Why Seeking Alpha Articles Should Be Ignored.
    Jan 3, 2014
  • just like yesterday- imagine how much lower the market would be today if the dollar weren't down 1% too
    May 20, 2010
  • wow.. imagine how much lower the market would be today if the dollar weren't down 1% as well.... scary to think about!
    May 19, 2010
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